Asian currencies at 7-month high as outlook brightens

EXCEEDING EXPECTATIONS:：The rupee and the won gained the most from US jobs figures, beating experts’ forecasts and the EU’s unveiling of stimulus measures

Bloomberg

Sun, Oct 07, 2012 - Page 15

Asian currencies rose to a seven- month high as US jobs data beat economists’ estimates, easing concern about a global slowdown and buoyed demand for emerging-market assets.

India’s rupee led gains with its fifth weekly advance, the longest winning streak since February, while South Korea’s won reached an 11-month high.

The rupee strengthened 1.9 percent this week to 51.8550 per US dollar in Mumbai, according to data compiled by Bloomberg.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s most-active currencies, climbed as much as 0.4 percent yesterday to 117.64, the highest since March 2. Its 60-day historical volatility declined to 2.60 percent from 2.69 percent a week ago.

The MSCI Asia Pacific Index of shares completed its best back-to-back gain in three weeks after European Central Bank President Mario Draghi said the ECB was prepared to start buying debt.

Foreign investors plowed US$600 million into the stock markets of India, Indonesia, Taiwan and Thailand this week, according to exchange data. Emerging-market bond funds took in US$1.05 billion of new money in the week to Thursday, according to research firm EPFR Global, taking this year’s inflows to US$39 billion.

Overseas investors bought US$260 million more local shares than they sold this week, exchange data show. Equities rose across Asia rose after a report yesterday showed applications for jobless benefits in the US increased less than economists forecast.

Taiwan’s inflation slowed last month to 2.96 percent from 3.43 percent in August, according to government data released yesterday. Price gains decelerated to 3.6 percent from 3.8 percent in the Philippines, another report showed.

The New Taiwan dollar strengthened this week as data from the US suggested the world’s largest economy is improving, boosting the island’s export outlook, as government bonds also advanced.

“Sentiment is pretty risk-on, money is going into the stock market,” said Frances Cheung (張淑嫻), a strategist at Credit Agricole CIB in Hong Kong.

One-month non-deliverable forwards strengthened 0.2 percent this week and 0.3 percent today to NT$29.225 per dollar, according to data compiled by Bloomberg. They traded at a 0.5 percent premium to the spot rate.

The NT dollar declined 0.1 percent this week to NT$29.368 against its US counterpart, according to Taipei Forex Inc. One-month implied volatility, a measure of exchange-rate swings used to price options, increased 12 basis points to 3.87 percent this week.

South Korea’s won rose for a second day to 1,111.40 per US dollar, erasing losses during the week after hitting 1,109.60, the strongest level since Nov. 1 last year. A South Korean central bank report yesterday showed the nation’s foreign exchange reserves rose by US$5.13 billion to a record US$322 billion.

Elsewhere, Indonesia’s rupiah was little changed at 9.592. Vietnam’s dong was steady at 20,890. Financial markets in China were closed during the week for holidays. The Philippine peso gained 0.7 percent to 41.427 and Thailand’s baht advanced 0.8 percent to 30.56, while Malaysia’s ringgit rose 0.3 percent to 3.0530.

The Australian dollar fell against all of its most-traded peers except South Africa’s rand after the nation recorded its widest trade deficit since 2008 and the Reserve Bank of Australia unexpectedly lowered its benchmark interest rate to 3.25 percent, the lowest since 2009.

The Aussie dropped 1.8 percent to US$1.0187 and reached US$1.0152, the weakest level since July 13. It lost 0.9 percent to ￥80.14.

Meanwhile, the New Zealand dollar, nicknamed the kiwi, depreciated 1.5 percent to US$0.8180. It touched US$0.8153, the lowest since Sept. 11.

The Dollar Index, which Intercontinental Exchange Inc uses to track the greenback against the currencies of six major US trade partners including the euro and the yen, fell 0.8 percent to ￥79.336 this week in New York. It touched ￥79.103 yesterday, the lowest since Sept. 21.

The US dollar dropped 1.4 percent to US$1.3045 per euro, after gaining 0.9 percent in the five days ended on Sept. 28 and rising 1.2 percent the previous week. The 17-nation currency gained 2.4 percent to ￥102.57. The Japanese currency depreciated 0.9 percent to ￥78.67 to the US dollar.